Does work pay in Slovenia?
Income transfers may generate work disincentives: if certain income payments are stopped when individuals (re)enter employment, this creates disincentives for taking employment – so called “unemployment trap”. To make work pay, several countries have introduced policies – financial incentives – which enhance employment opportunities for marginal groups in the labor market. Such policies increase in-work incomes and so improve work incentives for those receiving only out-of-work incomes. This paper tries to shed light on two questions, first being how does “making work pay” work in Slovenia, compared OECD countries, and the second, should Slovenia introduce earnings supplements or other in-work arrangements in tackling possible unemployment trap. According to international comparison Slovenia does not “step-out”, when we look at net replacement rates. Slovenia, however, has not introduced a single active labor programs that would stimulate directly and financially unemployed to join (official) employment, even though a lower paid job. In the paper we suggest the implementation of some kind of in-work arrangement at least for those, who are potentially less stimulated to reemploy.
Volume (Year): 29 (2005)
Issue (Month): 4 ()
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- Giuseppe Carone & Herwig Immervoll & Dominique Paturot & Aino Salomäki, 2004. "Indicators of Unemployment and Low-Wage Traps: Marginal Effective Tax Rates on Employment Incomes," OECD Social, Employment and Migration Working Papers 18, OECD Publishing.
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European Economy - Economic Papers
197, Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission.
- Giuseppe Carone & Aino Salomaki & Herwig Immervoll & Dominique Paturot, 2004. "Indicators of unemployment and low-wage traps (Marginal effective tax rates on labour)," Labor and Demography 0409007, EconWPA.
- David Card & Philip K. Robins, 1996. "Do Financial Incentives Encourage Welfare Recipients to Work? Evidence from a Randomized Evaluation of the Self-Sufficiency Project," NBER Working Papers 5701, National Bureau of Economic Research, Inc.
- Robert Haveman, 1995. "Reducing Poverty while Increasing Employment: A Primer on Alternative Strategies, and a Blueprint," OECD Jobs Study Working Papers 7, OECD Publishing.
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